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St. Jude Children’s Research HospitalResearch, Analysis, Recommendations

Advertising Research 530

Amanda AndrewsSarah BowmanQiming FengJenna McVey

Julie Stansberry

Table of ConTenTs

Situation Analysis Industry Overview 1

Client Profile 3

Competitor Analysis 6Consumer Analysis 8Primary ResearchResearch Questions 11

Method 11

Analysis Research Questions Tested 12

Recommendations 15

Conclusion 16

Appendix 18

References 31

Situation AnalysisIndustry Overview

Size of Industry

More than 160,000 children worldwide are diagnosed with cancer every year (“Stand Up to Cancer,” 2008). Cancer remains the leading cause of death by disease in children ages one to 15 in North America. The disease kills more than cystic fibrosis, congenital anomalies, muscular dystrophy, asthma, and AIDS combined. The cancers that affect infants, children, teens, and young adults are different than those that strike adults, so they require specific research, according to Kathleen Ruddy, executive director of St. Baldrick’s Foundation. Childhood cancer research often benefits adults with cancer, but the opposite is not as common (“Stand Up to Cancer,” 2008). In addition to cancer, there are more than 8 million children a year who die of preventable diseases in the developing world, according to the Childhood Disease Research Foundation (CDRF) (2008). That includes more than 4 million children who die in the first year of life from infections. Many can be treated and cured, but a major barrier to therapy is diagnosis. The best diagnosis is growing the offending organism using bacterial culture techniques, but this takes several days and expensive facilities to identify (“Childhood Disease Research Foundation,” 2008). There are numerous organizations and foundations in the nonprofit sector devoted to researching and finding cures for childhood diseases, cancer, or a combination of the two. They all have similar goals - to research, find cures, improve the quality of life, and increase survival rates for these helpless children. The CDRF promotes and funds research, treatment, and education and puts a special emphasis on new or alternative technologies and cures for children. Unlike many organizations and foundations, the CDRF focuses on all childhood diseases, rather than one specific type (“Childhood Disease Research Foundation,” 2008). Other organizations, such as CURE Childhood Cancer, are devoted to increasing the childhood survival rate of those battling cancer specifically (“About Cure,” 2012).

According to the National Center for Charitable Statistics (2010), there were 120,810 private foundations in the U.S. in 2010. They reported a

combined revenue of an estimated $43.8 billion and assets totaling more than $582.5 billion. It was reported that 48 of these private foundations were nonprofit organizations performing medical, pediatric research. Forty-one of these organizations reported fiscal data yielding total reported revenue for the year of $98.2 million and assets of more than $56.5 million (National Center for Charitable Statistics, 2011). Although not all nonprofit organizations, there are 188 pediatric oncology hospitals that are part of the Children’s Oncology Group (CureSearch for Children’s Cancer, 2012). U.S. News and World Report “America’s Best Children’s Hospitals for Cancer” ranks the top 50 pediatric cancer facilities in the country. Currently, the top five in descending order are Children’s Hospital Boston and Dana-Farber Cancer Institute, Children’s Hospital of Philadelphia, St. Jude Children’s Research Hospital, Texas Children’s Hospital, and Cincinnati Children’s Hospital Medical Center (US News, 2012).

Forecasts Because remarkable progress has been made on understanding cancer biology in the past 25 years, new technologies and discoveries are dramatically changing cancer therapy (Nelson, 2008). Many physicians and researchers believe we are entering an era of change. This change will include tailoring treatments to fit the needs of individual patients. According to Jack van Hoff, MD, Pediatric Hematology Oncology at Dartmouth-Hitchcock Medical Center, the focus changed from killing cancer cells with broadly acting poisons to controlling cancer cell growth with agents that target the cancer (“Stand Up to Cancer,” 2008). He said, “Unfortunately, we are learning that cancer is a far more diverse and

Source: http://www.orlandohealth.com/demomdanderson/CancerResearch/CancerResearchInstitute.aspx?pid=6776

Brief History

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complicated disease than we had imagined. The mechanisms which lead to uncontrolled growth for one cancer are not necessarily the same as those that lead to growth for other tumor types” (“Stand Up to Cancer,” 2008). The need for cancer research is now at a heightened level due to these circumstances, which means that support for such research must increase, too.

The Economy The donations critical to cancer research and patient care vary annually. According to the Giving USA Foundation (2011), from 2008 to 2010, overall charitable giving in the U.S. declined approximately -4.2%. The foundation noted the “sharp decline in the economy” during this time of recession as a contrib-uting factor (p. 18). However, in the past two years, there has been an increase in charitable donations.Figure 1

Graph 1

In 2010, overall giving increased by 3.8%, reflecting what was referred to by the organization as “modest economic recovery” (p. 16). In 2011, the annual report specified that health-related organizations focused on disease prevention, and research saw donations increase to $22.83 billion during that year (see Figure 1). This is an increase of 1.3% over similar donations made in 2010.

More specifically, charitable giving to 182 health care organizations illustrated a fairly steady increase in donations from February 2011 to June 2011, with decreases beginning in July. A seasonal increase in donations was noted in November but at less than even half of February’s total contributions (see Graph 1). Giving dropped back down in December (Blackbaud Index of Charitable Giving, 2012). Research would be required to determine if this unsteady end-of-the-year contribution is an effort to meet the tax write-off deadlines and holiday giving goals.

Legal/Regulatory Issues The nonprofit pediatric industry does not come without regulatory issues, though, and in December 2004, the Food and Drug Administration (FDA) approved clofarabine for refractory pediatric acute lymphoblastic leukemia. This was a milestone because of the 120 new cancer therapies for adults approved by the FDA between 1948 and 2003, only 30 have shown use in children, and only 15 of them acquired any labeling for pediatric use. The higher number of oncology drugs labeled for use in adults versus children is a challenge pediatric cancer drug development faces (Boklan, 2006). Congresspeople from Texas, North Carolina, and Maryland introduced legislation that would give pharmaceutical companies incentive to develop new drugs for rare pediatric diseases, such as childhood cancers, that have not been developed in decades because they are not profitable. The Creating Hope Act of 2011 would expand the cost-neutral FDA priority review voucher program, which would allow pharmaceutical companies to expedite FDA review of more profitable drugs in return for developing treatments for rare pediatric diseases, according to the Congressional Childhood Cancer Caucus website (“Congressional Childhood Cancer Caucus,” n.d.). Nancy Goodman, founder of Kids v. Cancer, said, “My son, Jacob, died of brain cancer two years ago because there were no effective drugs available to him. The Creating Hope Act gives us all hope that one day, children with brain cancer will not have to suffer Jacob’s fate” (“Congressional Childhood Cancer Caucus,” n.d.).

Societal/Cultural Considerations The Giving USA Foundation (2011) clarifies that charitable giving in response to natural disaster and economic hardships fluctuates. However, such

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Source: Blackbaud Index of Charitable Giving

Source: Blackbaud Index of Charitable Giving

donations are classified under human services organizations, not health care. As aforementioned, the economic status of the country is the most prominent societal consideration that affects all charitable giving. With health care becoming a more apparent topic in the U.S., more research is needed to determine if there has been a change in donations to pediatric facilities on the heels of state-funded health care reform.

Client Profile

One pediatric facility that is affected by such charitable giving is St. Jude Children’s Research Hospital, which was founded as the result of a simple promise. A struggling actor at the time, Danny Thomas, asked St. Jude Thaddeus, the saint of hopeless causes, to “help me find my way in life, and I will build you a shrine” (St. Jude Children’s Research Hospital, 2012). Thomas never forgot his promise. Once his acting career started to flourish, he began to make his promise a reality. In 1955, he started fundraising efforts with a team of local businesspeople. Thomas was able to share his idea through various benefit shows and visiting numerous cities around the country. His vision was to create a research hospital devoted to curing catastrophic diseases in children. In 1957, Thomas used his Lebanese decent to partner with fellow Arab-American communities to form the American Lebanese Syrian Associated Charities (ALSAC), an organization with the sole purpose of raising funds to support the daily activities of St. Jude. The hospital opened its doors in Memphis, Tenn., in 1962. St. Jude has six affiliate hospitals: St. Jude Midwest Affiliate in Peoria, Ill.; LSU Health Sciences Center in Shreveport, La.; Our Lady of the Lake Regional Medical Center in Baton Rouge, La.; the St. Jude Tri-Cities Affiliate in Johnson City, Tenn.; Huntsville Women’s and Children’s Hospital in Huntsville, Ala.; and St. John’s Hospital in Springfield, Mo. Two-thousand-five marked a big growth year for St. Jude as it completed the $1 billion expansion project, more than doubling the size of the original campus. The expansion included its pediatric research center along with the departments of Chemical, Biology & Therapeutics and Immunology. St. Jude now has 2.5 million square feet of research, clinical, and administrative space dedicated to its mission “to advance cures, and means of prevention, for pediatric catastrophic diseases through research and treatment... where no child is denied based on race, religion, or

History

family’s ability to pay” (St. Jude Children’s Research Hospital, 1962). Today, St. Jude houses 78 beds and employs more than 3,600 people. On average, 7,800 children are seen each year and treated on an outpatient basis. Today, the daily operating costs of $1.7 million are primarily funded through public contributions. These contributions are made to support the dream of Danny Thomas: “No child should die in the dawn of life” (St. Jude Children’s Research Hospital, 2012).

As a nonprofit organization, donations are crucial in keeping the doors of St.Jude open to sick children. Public support provides more than 75 percent of St. Jude funding for daily operations. During the past five years, 81 cents of every dollar received has supported the research and treatment of catastrophic diseases in children. These figures are reflected in the pie chart. The other 19% of donated funds are allocated to fundraising costs (13%) and administration (6%). This means it costs 13 cents to bring in every dollar of donations.

Donations

Source: ALSAC/St. Jude Children’s Research Hospital, Annual Report, 2010

Figure 2

Though public support accounts for a majority of the funding, the yearly total revenue for St. Jude includes several other factors. The total revenue from 2006 to 2010 is shown in Graph 2. The numbers reflect total support (contributions, bequests and special events), net patient services, research grants, net investment income, and other for the past five years. A noticeable change in total revenue occurred during the 2008-2009 period, a recession in the economy of the United States. In 2009, St. Jude suffered a loss of $368,351,000 in net investment income, making 2009 significantly lower in total revenue. However, as seen in the graph, the total support portion of the revenue gradually increased from 2006 to 2010. Graph 3 represents a graph of only the total support (contributions, bequests, and special events), where the stable increase is evident.

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Source Figures: ALSAC/St. Jude Children’s Research Hospital, Annual Report, 2007, 2008, 2010

Graph 2


Graph 3

As mentioned earlier, about 13 cents of every dollar donated is used to cover fundraising costs. Graph 4 shows the total fundraising expenses each year for the past five years. Fundraising expenses increase from 2006 to 2010. As donations increased (Graph 2), the expenses to raise that money increased.

Fundraising Expenditures


Graph 4

In 2008, people and organizations in the United States donated $307.65 billion through individual donations, charitable bequests, corporate donations, and grants (GivingUsa Foundation, 2008). Health organizations

Share of Charitable Donations

received approximately $21.64 billion, giving them 7% of the total donation (GivingUSA Foundation, 2008). Therefore, St. Jude received approximately 3% of the donations to health organizations.

St. Jude utilizes several media channels in efforts to acquire funds for daily operations as well as raise awareness. Most of the marketing is allocated through television, radio, Promise magazine, the St. Jude website, and social media. Television. Television offers a way to reach millions of households each year. St. Jude dedicates a website, http://www.stjude.tv/, to information regarding television specials airing in local and national markets. A Place of Hope is the major one-hour television special hosted by Marlo Thomas each year. The show shares the individual stories of St. Jude patients and their families while on their journey through treatment at St. Jude. In addition to television specials, St. Jude also airs 30-second national commercials featuring celebrity endorsements. Celebrities such as Jennifer Aniston, Robin Williams, Morgan Freeman, George Lopez and Dwyane Wade donate their time and talents to these television campaign advertisements. According to Zmuda (2011), much of St. Jude’s on-air media exposure is donated or discounted in order to maintain cost-effective marketing. Radio. Radio marketing is another large media channel utilized through various radiothons to raise funds for St. Jude. Two of the major radiothons include Country Cares for St. Jude Kids and Promesa y Esperanza (a marketing effort geared toward Hispanics). Promise Magazine. St. Jude’s communication department publishes Promise magazine quarterly. The magazine can be viewed online and shares the latest research happenings at St. Jude and the stories of patients and their families. It allows patients and families, employees, outside research and clinical staff, volunteers, and donors to stay connected with the activities at St. Jude. Website. The St. Jude website (www.stjude.org) offers general information about St. Jude’s mission and history as well as information on patient resources, clinical programs, research, and ways to help. Donors are able to make direct donations through the website, where there is also information on how to make donations via phone and mail. Social Media. The St. Jude homepage offers links

Media Strategy

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to sign up for updates via email, mobile phones, and RSS (Really Simple Syndication) feeds. In addition, links are provided to various social media platforms. The platforms include: Facebook. The Facebook page features information about the hospital, places for visitors to leave comments, photos of events and activities, and a 50th anniversary section. The page also highlights a “Patient of the Month,” where visitors can read the story of one child’s battle for survival. Another feature on the Facebook page allows visitors the “Donate Now” option where direct donations can be made. Twitter. Twitter provides a platform to share fundraising information and promote various events. As of February 27, 2012, St. Jude had 166,818 followers on its Twitter account. The account was first opened in June of 2011 under the handle @St.Jude and has since composed nearly 2,000 tweets. YouTube. A YouTube account was established in 2007 under the URL address http://www.youtube.com/mystjude. The site serves as a platform to play various marketing and promotional videos created by the communication department at St. Jude and ALSAC. Featured playlists include uploaded videos, St. Jude sports involvement, goals for St. Jude, country cares for St. Jude kids, St. Jude give thanks/walk, and Tri Delta. As of February 27, 2012, the YouTube channel had 1,865 subscribers and 780,535 video views.

St. Jude Children’s Research Hospital (2012) positions itself as “one of the world’s premier pediatric cancer research centers.” It also ranks first in awareness among national children’s charities. According to a 2006 Zogby International Cause survey, 9 out of 10 Americans have heard of St. Jude. According to a Harris Interactive 2010 poll, St. Jude is among the most trusted nonprofit organizations. These give St. Jude an advantage over other charities by having strong name recognition and a trusted reputation.

Positioning

Through the various media channels, St. Jude utilizes a number of different strategies to attract donors. The pie chart (Graph 5) represents the 2010 breakdown of contributions by strategy. Direct Mail Marketing. National direct mail marketing represents more than half of the 2010 contributions. The program sends more than 100 million pieces of mail

Donation Campaigns

Source Figures: ALSAC/St. Jude Children’s Research Hospital, Annual Report, 2010

Graph 5

to donors each year, bringing in $280 million annually (St. Jude Children’s Research Hospital, 2009). Public Support. Public support strategies are another major contribution to fundraising. Public support strategies involve dinners, galas, local events, and gift planning for major donation commitments. Specific events include the St. Jude Math-A-Thon, Up ‘til Dawn, and Dream Home Giveaway. The Math-A-Thon involves kindergarten through eighth grade students who solve math problems and obtain pledges for correct answers. Up ‘til Dawn involves college students who host St. Jude fundraising and awareness events throughout the year with a finale event of staying up until dawn to honor St. Jude patients. The dream home giveaway raffles off a single-family home. The money earned goes directly to St. Jude. Corporate Partnerships. St. Jude lists 68 corporate sponsors on its website. Several featured corporate partnerships participating in the Thanks and Giving campaign include Target, Chili’s, Kay Jewelers, CVS Pharmacy, Kmart, Brooks Brothers and Dick’s Sporting Goods. Corporate partnerships help provide different levels of support through various campaigns and sponsorships. Thanks and Giving. A major corporate campaign includes the Thanks and Giving campaign, where consumers are asked to donate at participating retail outlets at checkout or by purchasing specialty items. The slogan of the program is to “give thanks for the healthy kids in your life and give to those who are not” (St. Jude Children’s Research Hospital, 2009).

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The year 2012 marks the 50th anniversary of St. Jude Children’s Research Hospital. In honor of the 50 years, the United States Post Office has honored the founder of St. Jude, Danny Thomas, with his picture on a commemorative Forever stamp. The governor of Tennessee, Bill Haslam, also declared the month of February “St. Jude Month” (St. Jude Children’s Research Hospital, 2012).

New Developments

Competitor Analysis

Two of the top nonprofit pediatric cancer facilities in the country are Children’s National Medical Center and Nationwide Children’s Hospital. According to LexisNexis Academic, these are the key competitors for St. Jude. East Tennessee Children’s Hospital is an additional, local pediatric facility considered a secondary competitor because it is the main children’s hospital in East Tennessee.

Primary Competitors

History To provide for the needs of the children who were sick due to the aftermath of the Civil War, a group of physicians came together, and on December 5, 1870, the Children’s Hospital of the District of Columbia was born. Now called the Children’s National Medical Center, it has been helping children for about 140 years. It includes primary health centers, regional outpatient centers, and pediatric primary and specialty practices throughout the metropolitan area. It is the only provider of pediatric care in the Washington area, and freestanding children’s hospital between Philadelphia, Pittsburgh, Norfolk, and Atlanta (“About Children’s National,” 2011). The medical center is a proven leader in developing innovative treatments for children in need (“About Children’s National,” 2011). U.S. News & World Report and the Leapfrog Group have ranked it among the top pediatric hospitals in America (“About Children’s National,” 2011). Children’s National cares for more than 370,000 children and teens each year from all around the world in areas such as pediatric emergency, trauma, cancer, cardiac and critical care, neonatology, orthopaedic surgery, neurology, and neurosurgery. The medical center is the largest non-governmental provider care in the District of Columbia,

Children’s National Medical Center

providing more than $50 million in care (“About Children’s National,” 2011). Donations The Children’s Hospital Foundation is a 501(c)3 organization that serves as the leader for fundraising for Children’s National. The foundation works to make partners with individual donors, corporations, and community organizations to help the doctors, nurses and clinicians at Children’s National make their vision and mission come true. According to the Children’s National (2010) report, the medical center had a total income available to care for the children of about $833,212,000. In 2008, people in the United States donated $307.65 billion through individual donations, charitable bequests, corporate donations, and grants (GivingUsa Foundation, 2008). Health organizations received approximately $21.64 billion, giving Children’s National 3.8% of the total donation.

Positioning Children’s National positions itself as a leading children’s hospital and also as an employer, an educator, and an advocacy leader. The medical center employs more than 6,000 staff members at more than 30 facilities. Children’s National faculty members are pediatric faculty of the George Washington University School of Medicine. Children’s National trains 84 pediatric residents and 115 fellows and other graduate trainees each year. Children’s National is also a leader in advocating for children around the nation. More than 30 years ago, the medical center established the first office that makes health advocacy a priority (“Children’s National Medical Center History,” 2011).

Creative Strategy Community Benefit Program. The medical center has a community benefit program that follows the CARE mission and benefits children and families across the country and internationally. The community benefit program strives “to do well by doing good” (“Community Benefit Program,” 2011). The mission of the Children’s National is to exceed in Care, Advocacy, Research, and Education by providing exceptional health care experiences, improving health outcomes, and being a leader in creating health solutions. The Parents’ Letter Project. Children’s National created an initiative to help others gain advice from those who have had similar experiences. The Parents’ Letter Project allows parents of children who have

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received care from the medical center to write letters to families going through the same treatment. These letters provide advice and support to people who are new to the process of Children’s National (“The Parents’ Letter Project,” 2011). Advocacy. Children’s National is a leader in pediatric health advocacy (“Advocacy,” 2011). The medical center created the Child Health Advocacy Institute (CHAI) to discover threats facing children and initiate programs to combat those threats.

New Developments In December 2011, Children’s National opened a 34,000 square foot Cardiac ICU that features 26 beds and private patient rooms. Also in 2011, the medical center opened an outpatient radiology facility in Rockville, Md. This child-friendly facility features specialized staff and state-of-the-art equipment using low dose technology. In July 2011, Children’s National opened seven operating rooms that will include robotic surgery and improve education and training.

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History Nationwide Children’s Hospital in Columbus, Ohio, has been treating injured and sick children since 1892. Now Nationwide Children’s is a leading pediatric hos-pital containing 950 medical staff members and 6,800 employees who provide for 37 counties. These employ-ees are dedicated to serving children and adolescents in need, regardless of ability to pay. About 933,000 patients visit the hospital annually. One of the largest pediatric hospitals in the nation, Nationwide Children’s is connected with the Department of Pediatrics of The Ohio State University College of Medicine (“About Us,” n.d.). It has been ranked by U.S. News & World Report as one of “America’s Best Children’s Hospitals” for five consecutive years and was ranked 6th on Par-ents magazine’s list of top 10 pediatric hospitals (Na-tionwide Children’s, 2009-2010). Donations Nationwide Children’s Hospital Foundation is in charge of building partnerships with corporations, indi-viduals, and organizations to help support the needs of the hospital. More than 800,000 children were treated at the hospital in 2008, and by 2012 that number will surpass one million (“Ways to Give,” n.d.). More than 19,937 donors raised more than $32,700,000 to support the hospital’s mission, according to the 2009 Nation-wide Children’s Hospital Foundation (2009) report. In

Nationwide Children’s Hospital

2008, people in the United States donated 307.65 bil-lion dollars through individual donations, charitable bequests, corporate donations, and grants (GivingUsa Foundation, 2008). Health organizations received ap-proximately 21.64 billion, giving Nationwide Chil-dren’s 1.5% of the total donation.

PositioningNationwide Children’s positions itself as a leading hospital in pediatrics and research. As an international leader in pediatrics, its scientists are able to perform high-quality research due to a 10-year history of fund-ing support from the National Institutes of Health (NIH) (“The Research Institute,” n.d.).

Creative Strategy Supplier Diversity Program. Nationwide Children’s purchases supplies and services from minority, women, and Central-Ohio businesses when it is financially pos-sible. The hospital encourages partners and organiza-tions to purchase from these diverse partners (“Diver-sity and Inclusion,” n.d.). Adopt a Family Holiday Program. During the holi-days, donations are collected for the Family Holiday Program. These donations are used to buy gift certifi-cates that are given to families in need. Healthy Neighborhoods, Healthy Families. In 2008, Nationwide Children’s started Healthy Neighborhoods, Healthy Families (HNHF). This initiative was created to make a commitment in making a positive difference for the surrounding community (Healthy Neighbor-hoods,” n.d.). The vision of this initiative is to create affordable housing, improve health and wellness, pro-vide academic enrichment programs, create safe neigh-borhoods, and increase the workforce.

New Developments Nationwide Children’s is building the nation’s big-gest pediatric expansion (“Campus Expansion,” n.d.). The new, 12-story main hospital adds 750,000 square feet, and a new research facility adds a third building to its top 10 NIH-funded Research Institute. This expan-sion is LEED-certified, which makes it environmen-tally friendly.

History In September 1935, the Knox County Crippled

East Tennessee Children’s HospitalSecondary Competitor

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Children’s Association was incorporated by efforts of Dr. Jarrell Penn, Henry Galbraith and Oscar Schwarzenburg, Sr. In 1955, the hospital was renamed to East Tennessee Children’s Hospital and has grown into what it is today. The 152-hospital is a not-for-profit pediatric medical center and is the only Comprehensive Regional Pediatric Center in East Tennessee (“Leading the Way,” n.d.). Positioning Children’s Hospital is a Comprehensive Regional Pediatric Center, certified by the state of Tennessee. This is the highest level of certification for pediatric care, and the hospital has the capabilities to care for seriously ill children in unique pediatric sections that are located away from adult care areas (“Comprehensive Regional,” n.d.). Children’s Hospital also works together with the University of Tennessee Medical Center.

Creative Strategy Miracle Balloons. This year-round event takes place in many local stores and restaurants. A total of $1 will be added to a customer’s purchase, which will then be donated to the Children’s Hospital. Dance Marathon. Each year in February, students from the University of Tennessee stay up all night and dance in order to raise thousands of dollars, which will be donated to the hospital.

New Developments Children’s Hospital is involved with the Knoxville Area Coalition on Childhood Obesity. Headquartered at the hospital, the group finds strategic ways to better the health of the children in the community by reducing the childhood obesity (“Community Outreach,” n.d.). The Children’s Hospital is also involved with Project ADAM. This is a not-for-profit national program that educates children and adolescents about life saving programs that could prevent cardiac arrest (“Community Outreach,” n.d.).

Consumer Analysis The consumer analysis will focus specifically on the millennial generation (those ages 18-34) because this group uses social media platforms the most, and research confirmed that charity organizations and nonprofits that used social media platforms combined with e-mail and regular mail tactics saw donations increase by 40 percent compared to others who did

not use social media (Garton, 2011). This choice also correlates with St. Jude’s desire to increase donations in a sustaining way. Richard Shadyac Jr., CEO of St. Jude, stated, “We want those people that are in pre-school now to be with us when they get to be 70 or 80 years old and are ready to make that legacy gift” (Zmuda, 2011).

Source: Bhaget, V., Loeb, P. & Rovner, M. (2010). The next generation of American giving.

Graph 6

Source: Bhaget, V., Loeb, P. & Rovner, M. (2010). The next generation of American giving.

Graph 7

According to “The Next Generation of American Giving,” a majority of fundraising campaigns are targeted at mature donors (those born before 1945). As Graph 6 demonstrates, currently the mature generation gives the largest gifts per year. However, the mature population allocates their donations across multiple charities (6.3 on average) as opposed to the 3.6 by Generation Y, otherwise known as Millennials (Bhagat, Loeb & Rovner, 2010). This being considered, the average dollar amount per charity is much closer, as seen in Graph 7. Bhagat et al. (2010) stated, “This would suggest that if you are one of those charities successful in attracting younger donors, they can be quite profitable, especially so when you consider their lifetime potential and responsiveness toward lower cost online communications” (p. 3). Millennials may have the lowest donation statistics, but they represent the future

of America as they make up one of the largest age groups in the United States, according to the 2010 census.

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Source: United States Census Bureau. (2010). Population by age & sex: 2010 [data file]

Figure 3

Millennials are confident, self-expressive, liberal, upbeat, and receptive to new ideas and ways of living, according to a study by Pew Research (2010). They get along well with their parents, respect their elders, and are on course to become the most educated generation in American history. Two-thirds of the millennial generation are wary of human nature. They embrace multiple modes of self expression (tattoos, social networking, piercings, etc.). Entry into the workforce has been compromised due to recession, but they remain more optimistic about their financial futures than their elders. Family is a major priority for this millennial generation (Pew Research Center, 2010).

Psychographics

According to Bhagat et al. (2010), direct mail serves as the most prominent channel through which Matures obtain information about charitable giving. However, members of the millennial generation most prefer receiving such information through websites and email. “The Next Generation of American Giving” also stated (Bhaget et al., 2010), “Facebook and other social media register as somewhat significant charity information channels for Gen X and Y” (p. 5). Academic research reinforces this concept in that Millennials prefer visual information over that which they must read to comprehend (Weiler, 2005). Internet usage, as well as the use of social networking sites, is higher among Millennials. According to Pew Social Trends (2010), 75% of Millennials have created a social networking profile. Millennials are more likely to use these social networking sites on a frequent basis, often visiting several times a day. This provides a low-

Information Sources

cost opportunity to connect with this generation for donations. “Consistent with information channels, Gen X and Y also consider messaging on social networks to be an appropriate form of solicitation, further building the case for multichannel marketing and expanding its scope” (Bhagat et al., 2010, p.7).

Source: Pew Internet and American Life Project. (2009). [Graph illistration the generations online 2009]. Generations online in 2009.

Figure 4

The hierarchy of effects is a linear model of communication that demonstrates the process starting with message dissemination to the desired end result of behavior change. A success rate of 50% at each stage is typical when creating a public relations campaign (McGuire, 1989). This means that 50% of the target population will become aware of the message. From this point, 50% of that population will have an attitude or perception change, and finally, 50% of the previous population will make a behavior change. Creative and relevant messages that bring potential donors from the awareness stage to the purchase stage and then keep donors at the purchase stage is ideal for a successful campaign. Potential donors tend to have an emotion tied to their actions, which is why messages should follow the feel-think-do pattern. This model of message ties into the millennial generation’s decision-making process. According to Lizarraga, Baquedano, and Cardelle-Elawar (2007), the millennial generation feels more pressure from emotional and social aspects in its decision-making. A message with an emotional appeal attracts the attention of this generation and, in turn, impacts their actions. Another consideration in the communication model is the influence of word-of-mouth on decision making. Millennials not only highly value the emotional aspects when making a decision but also are greatly influenced by their peers’ opinions.

Hierarchy of Effects

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Donations among the millennial generation are lower than for older generations. As previously seen in the “Donations by Generation” Graph 6, the yearly amount donated increases with age. Early on, the donations may be small, but over time the amount increases. Bhagat et al. (2010) states that “Gen Y is already giving, and their commitment to philanthropy will grow with time” (p. 13). Organizations must attract this young generation early in their donation life cycle in order to benefit from this generation’s larger donations in the future.

Involvement According to Bhagat et al. (2010), 56% of Millennials make donations to charities each year (p. 4). This is the lowest percentage when compared to the older generations and provides an opportunity for companies to market more to this generation in order to pursue what Bhagat et al. (2010) refers to as the “cradle to grave” fundraising strategy (p. 13). In this strategy, companies attract the younger generations early in order to keep a life-long relationship and sponsorship with them. They are starting small with those who have less disposable income.

Donation Life CycleProcesses

Millennials like the following: connection, diversity, time with friends, civic activities, taking care of the environment, authenticity, quality, access to information, ongoing learning, career development, and freedom to travel (Fields, 2008). They love collaboration and will crowd-source their way to a solution when faced with a difficult task or challenge (Cognizant, n.d.). Millennials dislike phonies and being talked down to (Fields, 2008). They also dislike hierarchy and glass ceilings since, in their online lives, everyone is equally accessible. Millennials believe every opinion is equally important. They want to be able to ask questions to anyone and know they are influencing important decisions (Cognizant, n.d.).

Likes/DislikesPerceptions

Political issues are of extreme importance to the millennial generation. This generation is often referred to as “Generation Obama” because in 2008, 66% of

PoliticsImportant Issues

them voted for Barack Obama for president (Halpin, 2009). Two-thirds of this young generation approve of Obama’s performance during his term as president. In general, younger voters are more likely to say something positive about politics in general than the older generations (Halpin & Agne, 2009).

Education is also important to the millennial generation. This generation believes that increasing government funding for schools ensures that more children will have an opportunity to obtain a quality education (Madland & Teixeira, 2009). As stated earlier, this generation is on its way to become the most educated in American history (Pew Research, 2010).

Education

Although the Millennial generation is on track to become the most educated in America, it is facing a significant reduction in employment opportunities, which has led to income instability. Figure 5 shows that from 2006 to 2010, those working full time decreased by 9%, while those working part time increased by 3%. Those unemployed or not actively seeking work also increased, both in the student category and in the unemployed category. Figure 6 shows that the millennial generation has the least amount of full-time employees, compared to Generation X and Boomers. They also account for the highest unemployment category of those same generations (Pew Research Center, 2010).

Problems

Source: Pew Research Center: Millennials: A portrait of generation next. (2010). [Graph illustration of young adult employment]. Full-time Employment Drops Among Young Adults.

Figure 5

Source: Pew Research Center: Millennials: A portrait of generation next. (2010). [Graph illustration of generations at work]. Generations at Work.

Figure 6

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Primary Research

Research Questions

The purpose of this study was to acquire an understanding of how St. Jude Children’s Research Hospital can utilize social networking sites to attract millennial donors. The researchers collected secondary data, and through an email to Sarah Newman from ALSAC, St. Jude’s sole fundraising organization, it was confirmed that the researchers’ findings were an area of concern for St. Jude Children’s Research Hospital. This was due to the fact that more than 75% of funding comes from donations. As secondary research has shown, older generations have traditionally been the target population for many nonprofit organizations seeking donations. This leaves the millennial generation as an untapped market that has the potential to be reached through cost effective social networking tactics. After narrowing down the generation to be targeted and the outlet by which to do so (social networking sites), the following research questions were developed to guide the next step of the research process.

1. What social networking sites should St. Jude focus on to elicit donations from the millennial generation?2. What type of content should St. Jude implement on its social networking sites to elicit donations from the millennial generation?

3. What forms of St. Jude online donation outlets are Millennials most likely to use?4. Does income level impact the likelihood of donating to a charity?5. Does visiting an organization’s social networking site relate to subsequent donations made to the organization?6. Does willingness to donate online or comfort in donating online affect whether or not donations are made to a nonprofit/charity?7. Do age and employment affect comfort in donating online?8. Do age and employment affect willingness to make a donation online?

Method

The survey consisted of 36 questions that comprised both categorical and quantitative data. The questions addressed demographics, knowledge, attitudes, and usage of social networking sites. Of the 36 questions, 6 of them were used to target or exclude portions of the sample in order to obtain more information regarding particular topics. Therefore, a respondent’s answer to one of these 6 questions would determine the next logical question for them to answer. This method of administration made it possible for the researchers to go more in depth with the questions on topics such as social networking usage, donations, and St. Jude social networking sites. The researchers uploaded the 36-question survey to Surveymonkey.com and created a link to the survey page. A draft of the survey can be seen in the appendix of this book. A pilot test was distributed to students in a social media communication course at the University of Tennessee made up of graduates and undergraduates. The nature of the course allowed problematic areas to be easily identified and corrected since a focus of the survey was on social networking sites.

Research Design

The research sample was gathered by a non-random purposive sampling method. The researchers emailed the link to 250 participants (50 acquaintances per researcher) who were of the millennial age range. According to a Pew Research document, this age range is from 20-34, although other sources report this age range as young as 18. Email was used for distribution of the survey link in order to keep the bias of social

Sample

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networking sites out of the sample. Each researcher sent the email to her own 50 acquaintances. The potential participants received a draft of the same email on March 19 with the subject line “School Project Help” followed by an explanation and the survey link. The researchers addressed the email to themselves and blind copied their 50 acquaintances in order to ensure privacy of potential participants. On March 22, 2012, a reminder email was sent to potential participants. A draft of the original email and the reminder email can be found in the appendix of this book. The survey link was available on Surveymonkey.com for five days (March 19 to March 23).

The researchers exported the survey data into a Microsoft Excel spreadsheet and reformatted the data to be compatible with SPSS statistical software. Multiple choice questions with multiple responses were transformed into separate variables with “yes/no” answers so as not to lose the integrity of the data. On question number seven, ranking the credibility of social networking sites, missing data was filled in with “N/A” (not applicable) if the respondents answered the question for some social networking sites and not others. This was because it could be assumed that by ranking credibility for some of the options, the respondent chose not to answer the other options based on not having the knowledge to do so. For the remaining questions, missing data was coded as an “888” and skip questions (where respondents skipped ahead if they did not need to answer the next set of questions) were coded as “999”. One case (respondent) was deleted due to an obvious abort of the survey after question number one. There were three other cases where respondents again made obvious aborts, but these respondents were kept on the basis that they had completed enough questions to still hold valuable data to the researchers. This left the sample size at 118 participants. The Excel file was uploaded into SPSS statistical software, and each numerical code for the variable was labeled. The researchers then ran tests on the data to answer their research questions.

Statistical Analysis (using SPSS)

AnalysisResearch Questions Tested

Additionally, researchers ran a one-sample t-test to determine levels of credibility of information found on each of the social networking sites according to the sample population. Before running the test, researchers removed the “not applicable” options for each of the social networking sites that were originally offered to respondents who did not use some of the platforms, so as not to skew results. Because of this, sample sizes for each of the social networking sites are different. Results showed that, on a scale from not at all credible (1) to extremely credible (5), LinkedIn had the highest mean of credibility of information (4.08), rating higher than very credible. Facebook has the fourth highest credibility mean, falling between moderately credible and very credible (3.27).

RQ1 asks, what social networking sites should St.

Jude Children’s Research Hospital focus on to elicit donations from the millennial generation? Researchers ran a frequency analysis on which social networking site each of the respondents used most often (of the social networking sites they indicated they used). Results showed that the majority (78%) of the millennial generation uses Facebook most often. Twitter is used most often by almost 6% of the population, followed by YouTube with a little more than 5%.

RQ2 asks, what type of content should St. Jude implement on its social networking sites to elicit donations from the millennial generation? Researchers analyzed responses from an open-ended question asking what type of content respondents would like to see on St. Jude’s social networking sites, and 58 of 118 responded (49%). The answers submitted focused on how the money would be used, emphasis on the mission of the organization, how much the money can really make an impact, and history about the program. Following are 8 open-ended responses from the survey population:

• Stories with happy endings of patients who become better.• A little history about the program. Some logos as well might get attention.• Progress made in the organization as a direct result of donations.• Inspirational ads with personal stories.• What they are raising money for, a total goal amount they are looking to meet, how much a specific amount can make an impact (ex. $25 can buy medicine for 1 child for 2 days).• Very detailed information as to where the funds are going to be used.• Statistics on hospital operation and budget.• Emphasis on helping all children regardless of race, religion or color.

Researchers then ran a frequency analysis on what would most encourage respondents to donate to a charity/nonprofit organization. Nearly half (50%) of respondents said that knowing how their donation was used would encourage them to donate. A large portion (30%) of respondents said becoming a member of a special donation group would encourage them to donate to a charity/nonprofit organization.

Another frequency analysis was run to determine how often respondents would expect a nonprofit organization to update its social networking site status. Almost 42% of respondents said they would expect a few times a week. 18% indicated once per week.

Researchers ran a frequency analysis on what percentage of St. Jude Children’s Research Hospital’s daily operating costs they predicted came from donations. Almost half (>47%) of people guessed below the correct range of daily operating costs percentages. Additionally, 5% of people either guessed that donations do not go toward daily operating costs or left the answer blank. This leaves a large percentage (>47%) of people who think at least 71% of St. Jude’s daily operating costs come from donations. Less than 17% of people guessed the exact range. More than 75% of St. Jude Children’s Research Hospital’s daily operating costs come from donations.

RQ3 asks, what forms of St. Jude online donation outlets are Millennials most likely to use? A frequency analysis revealed that most people (>46%) would like to have a link to the nonprofit’s website to make the donation. Paypal was the next highest at almost 18%.

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A second frequency analysis revealed that an overwhelming majority (>92%) of respondents preferred one-time donations over recurring donations.

RQ4 asks, does income level affect the likelihood of donating to a charity? Researchers did a crosstabulation of income levels and those who had made a donation to a nonprofit or charity. In the $50,000 to $69,999 income category, the expected number of people who donated was 8, while the observed count was 10, meaning there were 2 more people than what was expected by chance. The income level of $70,000 to $89,999 had the largest difference, with 9.6 expected and 12 observed. This means there were 2.4 more people that made a donation than what was expected by chance. The following table lists the differences between the expected and observed count with regards to the remaining income ranges.

The results of the Pearson chi-square (p=.000) and the phi value (.831) indicate the association between income level and donations made to a non-profit/charity is significant. Thus, the different income levels do differ on whether they have made a donation to a nonprofit or charity.

RQ5 asks, does visiting an organization’s social networking site relate to subsequent donations made to the organization? Because this question was asked as a skip logic question, only those who indicated they made a donation before were asked if they had visited the company’s social networking site before making the donation. When only taking into account valid responses, a frequency analysis revealed about 37% of people had looked at a company’s social networking site(s) before making a donation. That leaves 63% of people who did not.

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RQ6 asks, does willingness to donate online or comfort with making a donation online affect whether or not donations are made to a nonprofit/charity? The two variables “willingness to donate online” and “comfort with making a donation online” were recoded to exclude any “not applicable” responses. An independent sample t-test revealed that there was a significant effect for whether donations were made online based on both comfort with making a donation online, t(112)=-2.45, p=.016, and willingness to make a donation online, t(113)=-3.1, p<=.003.

RQ7 asks, do age and employment affect comfort in making a donation online? A Factorial ANOVA revealed that there was not a significant interaction for age and employment, F(4, 97)=.98,p=.420. The researchers cannot make the claim that age and employment impact the millennial generation’s comfort in making a donation online.

RQ8 asks, do age and employment affect the millennial generation’s willingness to make a donation online? A Factorial ANOVA revealed that there was not

a significant interaction for the treatment, F(4, 98)=.49, p=.745. The researchers cannot make the claim that age and employment impact the millennial generation’s willingness to make a donation online.

Recommendations The following recommendations for St. Jude Children’s Research Hospital have been formulated after analysis of the survey results and statistical tests.

Recommendation 1: Target Facebook as a major social networking site to elicit donations. Research revealed that the millennial generation should be targeted strongly via Facebook. According to the survey results, 78% of social networking site users identified Facebook as the site used most often. Facebook also ranked higher in credibility to the millennial generation than many other social networking sites. This site is a great way to build relationships with target publics. Continue to build relationships with potential donors via Facebook. Recommendation 2: Highlight success stories on St. Jude’s social networking sites. Respondents to the survey were asked open-ended questions about what type of content they would like to see on St. Jude’s social networking sites. A total of 58 out of a possible 118 (49%) responded. The popular answers were success stories, how the money would be used, an emphasis on the mission of the organization, how much the money can really make an impact and the history of the program. By highlighting success stories specifically, St. Jude can target many of these aspects by showing that the money helped save a child’s life, which relates to the mission, and how the money was used/how the money made an impact.

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Recommendation 3: Highlight how donation money is used on St. Jude’s social networking sites. It is important to highlight how donation money is used on St. Jude’s social networking sites. Half of the respondents said that knowing how a donation is going to be used would most encourage them to donate. What is more interesting is that 47.5% guessed that the percentage of donations that go to cover the daily operating costs for St. Jude is lower than the actual percentage. This shows that a majority of respondents are unaware of how much money is needed to support St. Jude. This alone would make a great feature story to highlight on St. Jude’s Facebook page, informing people that ultimately, lives are saved from donations. Recommendation 4: Update St. Jude’s social networking site status a few times a week As results showed, 45% respondents would expect a nonprofit organization to update its social networking site a few times a week. The next highest percentage was 18% recommending once per week. Updating St. Jude’s social networking site a few times a week would leave fans content. Updating the site too little or too much may discourage fans from interacting with St. Jude. An example of a post on Facebook is, “Have you all heard of our new, state-of-the art operating machinery? Your donations helped fund this new machinery that will make operating less invasive on the children. Thank you for all your support. Check out the machinery here!” Recommendation 5: Link social networking sites back to the St. Jude main website for users who intend to make a donation. A frequency analysis revealed that most people (46.6%) would like to have a link to St. Jude’s website to make the donation. St. Jude should link social networking sites back to the main St. Jude website so that users can identify that they are making a donation specifically to the causes of St. Jude. Recommendation 6: Make the donation a one-time donation with an option of recurring donations. More than 92% of respondents preferred one-time donations rather than recurring donations. On St. Jude’s Facebook page, fans have the option to

make a donation, but there is a disclaimer that clearly states, “Your card will be charged automatically each month.” Results show this is not what respondents want, and as a result, it may deter St. Jude’s Facebook fans from donating at all. Allow fans to make one-time donations with an option to be charged each month.

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Conclusion As a nonprofit organization, St. Jude Children’s Research Hospital heavily relies on donations for everyday functions. St. Jude houses 78 beds and employs more than 3,600 people. On average, 7,800 children are seen each year, and daily operating costs of $1.7 million are primarily funded through public contributions. Donations provide more than 75% of St. Jude’s funding for daily operations. Because of this, strategic communication through the use of social networking sites is needed to increase donations. Secondary research confirmed that nonprofits, like St. Jude, that used social media platforms combined with e-mail and regular mail tactics saw donations increase by 40% compared to others who did not use social media. This led the researchers to choose a consumer group who uses social media platforms the most, which is the millennial generation. Although they may have the lowest donation statistics as of now, they represent the future of America as they make up one of the largest age groups in the U.S. Building relationships with this group now may help increase donations in the future. In order to tap into the current thoughts and opinions of the millennial generation, the researchers produced a survey to learn more about what social networking sites this generation uses, what type of content they prefer, how aware they are of the amount St. Jude relies on donations, etc. Based on the data received from the survey, 78% of respondents who used social networking sites identified Facebook as the site used most often. They want to see content a couple times a week that relates to success stories, how the money would be used, an emphasis on the mission of the organization, how much the money can really make an impact and the history of the program. It is important to highlight the amount of donations St. Jude needs on the social networking sites as many respondents guessed a lower percentage, and 50% of the respondents said that knowing how a donation is going to be used would most encourage

them to donate. To the Millennials, it is important that there is a link from the Facebook page to the St. Jude main website for donating money and that there is an option for a one-time donation, instead of automatic recurring donations. Strategically communicating to the millennial generation and using tactics that interest them through social networking sites may increase donations. Building strategic relationships through social networking sites will help St. Jude in their mission to interact and stay with donors throughout their lifetime.

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18

AppendixEmail Examples

19

Survey Questions

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